Exciting Times in the Funeral Plan Market
Massive changes in the market are giving the public even better value and wider choice. MPs seem to think that prepaid funeral plans are somehow responsible for pushing up the cost of funerals. Professional advisers know that is wrong, and it is nice to have some proof to share. The complete reverse is true: prepaid plans are cutting funeral costs, certainly for those who own them.
In recent days at least four of the major funeral plan providers have introduce exciting (well, to us) new funeral plans. At least two more providers are gently pushing into the market at lower prices.
The Co-op and Dignity have introduced low cost direct cremation plans. (We’re not wildly keen on Direct Cremation plans – see our section on them. The funeral plan market has never been more competitive.
Golden Charter have slashed prices and improved their competitive position substantially.
Both Golden Charter and Safe Hands have introduced interesting new products which slim down the cost of funerals. You do lose a little flexibility, but the costs are much reduced.
As readers will know, the fund holding side of funeral plans is highly regulated by the Financial Conduct Authority. Whatever the Funeral Planning Authority may say, they are not a Regulator.
Providers in the Funeral Plan market must abide by advertising authorities, as must advisers like ourselves, and the Advertising Standards Authority, Trading Standards and the Courts can help anyone who is badly treated by the industry. (We say, always read the small print – there is rarely that much of it in this business!)
Does Parliament Really Want To Reduce Competition and increase Costs?
Members of Parliament have recommended that sales of funeral plans be regulated by the Financial Conduct Authority. What they don’t understand is that – far from reducing prices and increasing competition, the reverse will happen. Financial Services became regulated in 1988. Around 90% of advisers were eventually driven out of the market, leaving most of the population (other than the wealthy) without advice. How Mainly through massive additional cost of complying with and paying for (often) silly rules. I remember sitting in my office when a client asked a simple question to which the answer was obvious to me – it was a Yes/No question. But I couldn’t answer it without going through lots of hoops and backside covering exercise. These days, if you went to a low cost Independent Financial Adviser, that Yes/ No answer would probably cost you £300. That is if you could find an adviser who takes on folk who are not wealthy. The days of free financial advice are gone – at least, if you want it to be independent.
The FCA have pretended to provide non-”advice” themselves and failed dismally, they have introduced hybrid business models and they are now encouraging “robo advice.”
So in nearly 30 years, the population has grown, the need for advice has grown dramatically, and the supply of advice has shrunk by 90% and the number of product suppliers has also shrunk substantially.
So if you want to reduce the number of people taking out funeral plans, reduce competition and allow prices to rise, ask your MP to promote the Financial Conduct Authorities efforts to take on ever more jobsworths.
There are very few independent advisers on funeral plans. We are one. Save the funeral plan market from higher costs and often pointless regulation. Keep costs down and competition up!